1. Field
This disclosure relates generally to payment systems and, more particularly, to a specialized multi-account payment consolidation system and process that allows a user to seamlessly draw funds from any number of external financial accounts to perfect payment at a point-of-sale.
2. Background
Consumers utilize a range of instruments for conducting daily retail transactions, including cash, personal check, any number of credit cards and a bank debit card. However, under the current infrastructure, consumers cannot utilize the full range of payment options available to them at a point-of-sale. Consumers are instead forced to use one payment method to satisfy a transaction at a point-of-sale. For example, a consumer at a retail register typically has the choice to pay by check, credit card, debit card or cash. If the consumer chooses to utilize two payment methods simultaneously (e.g., splitting a bill by paying partly with cash and partly with credit card), that choice invariably complicates the transaction, requiring the cashier to perform additional steps at a register to enable a multi-account payment. As a result, utilizing multiple accounts to enact payment at a point-of-sale is generally discouraged, because it is inconvenient for the consumer, the retailer and other consumers waiting at the register.
Consumers suffer many disadvantages as a result of this deficiency. For example, both credit cards and debit cards routinely charge large penalty fees for charging past the credit limit or over-drafting. Most consumers are not fully aware of these costs and penalties, and the impact they can have on the consumers' cost of credit. These penalties could easily be avoided if consumers had the ability to seamlessly utilize the full range of payment options available to them at a point-of-sale. For example, it is less common for a consumer to be near the limit of his credit card balance for all of his/her credit cards. And yet, momentary inattention to the balance of a single card may cause the consumer to suffer a large penalty fee for overcharging a single card, even as he/she possesses other credit cards with available credit. In the worst case, the card may even be declined, causing a fair amount of distress, not to mention public embarrassment as a result of delaying the checkout process for him/herself and other customers on line, temporarily removing oneself from the checkout queue, reducing the number of items being purchased, or simply walking away from the transaction altogether. Furthermore, if a consumer is near his balance limit for the majority of his accounts, it may be impossible for the consumer to pay a bill with any single account. The consumer would have the ability to perfect payment if he could combine the available balances from multiple payment sources (such as, for example, cash reserves, debit accounts, credit accounts, etc.) into a single payment. Unfortunately, the current infrastructure simply fails to easily support this kind of transaction.
Furthermore, many retailers accept only a certain type of credit card, limiting the accounts with which a consumer may pay. Retailers are also burdened with negotiating arrangements with different credit card companies, often paying higher premiums for some cards, or simply refusing them altogether. These factors work to the detriment of both the consumer and retailer. The consumer is forced to select one of the retailer-approved cards for use, limiting the utility of possessing multiple credit cards, and ironically forcing the consumer to have at least a few different credit cards to begin with, if he wishes to shop at more than a handful of retailers. Retailers are forced to impose these artificial limitations on accepted payment methods because of the difficulty of procuring payment arrangements with all possible credit card providers. Oftentimes, the non-accepted credit cards (especially store-specific cards) have significantly advantageous secondary benefits, such as a high cash-back incentive. The inability to use the non-accepted credit card universally seriously frustrates the usefulness of possessing that card in the first place.
Security is another issue with the current system. Credit card security is typically predicated only on possession of the card and a signature matching the signature on the back of the card. This security system is poor, as signatures are easily forged, and retail cashiers rarely examine signatures during payment. Card numbers are also vulnerable to a large number of fraud and identity theft scams. Exposing the card number to a large number of retailers and human handlers (such as cashiers) merely increases the chances of victimization both in person and online.
Thus, there is a need for a multi-account payment consolidation system and process that gives a consumer the ability to seamlessly draw from multiple unrelated financial accounts to maximize the utility of the payment methods available to him, while simultaneously masking financial difficulties and providing enhanced levels of security against account fraud and identity theft.